Thread: COMMON SENSE FIX Dave Ramsey Bailout Plan

To send an alternative to the Senators and Representatives, you may want to send them this "Common Sense" Plan drafted by Dave Ramsey.

Years of bad decisions and stupid mistakes have created an economic nightmare in this country, but $700 billion in new debt is not the answer. As a tax-paying American citizen, I will not support any congressperson who votes to implement such a policy. Instead, I submit the following three steps:

Common Sense Plan.

I. INSURANCE

A. Insure the subprime bonds/mortgages with an underlying FHA-type insurance. Government-insured and backed loans would have an instant market all over the world, creating immediate and needed liquidity.

B. In order for a company to accept the government-backed insurance, they must do two things:

1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes.
b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile while
working with the borrower again limiting foreclosures and ruined lives.

2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages. This keeps underperforming executives from being paid when they don't do their jobs.

C. This backstop will cost less than $50 billion a small fraction of the current proposal.




II. MARK TO MARKET

A. Remove mark to market accounting rules for two years on only subprime Tier III bonds/mortgages. This keeps companies from being forced to artificially mark down bonds/mortgages below the value of the underlying mortgages and real estate.

B. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks and it costs the taxpayer nothing.




III. CAPITAL GAINS TAX

A. Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous and immediate liquidity in the markets. Again, this costs the taxpayer nothing.

B. This move will be seen as a lightning rod politically because many will say it is helping the rich. The truth is the rich will benefit, but it will be their money that stimulates the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down. This is not a time for envy, and it's not a time for politics. It's time for all of us, as Americans, to
stand up, speak out, and fix this mess.(quote)


We are at a crucial time in our country's financial history. We need everyone's help! Here are 3 steps you can take that will change our nation's future:

Pray for them to resist a spirit of FEAR and to embrace WISDOM. Even if you don't like them or agree with them, pray for them and tell them you are praying for them. There is a spirit over this problem that must be broken. Also, most of the media personalities are afraid as well and that is affecting their reporting. Pray for fear to be removed from them; they are making this worse.

Send The Common Sense Fix to your Representatives and Senators and tell them how you expect them to vote, and that if they put this nation in $700 billion of debt, that you will vote them out. It's their job to listen to us! (Whichever presidential candidate or political party that champions this plan from their leadership down will likely become the next president. That is because this plan fixes the crisis while going along with the wishes of the vast majority of Americans.)

1. Read the PDF
2. Copy the text file
3. Send it to your Senators and representatives.

Send a link to this page to everyone in your address book and tell them to urgently follow these 3 steps TODAY. The more people we have supporting this and contacting their elected leaders, the more likely we can turn our economy around!

http://www.daveramsey.com/etc/fed_bailo ... ?ictid=sml

I think some of this is already being considered or put in place, but it could be reinforcement.



Ephesians 4:32

I like this. I faxed it to my congress member and to the Senators last night. Looks like they are taking at look at the Mark to Market problem today.

Thank you Gogo for your idea and for your help.

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This part sucks!! It would allow all the people, who should not have qualified for a loan in the first place, to be bailed out.

1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes.
b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile while
working with the borrower again limiting foreclosures and ruined lives.

Equalizer, that part was mentioned by some as not questionable. Many of those loans have been given to people who should have never received them and who could not afford them now. It is probably to avoid the continuing increase in the number of empty homes on the market due to possible foreclosure.

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Originally Posted by GeorgiaPeach

Equalizer, that part was mentioned by some as questionable. Many of those loans have been given to people who should have never received them and who could not afford them now. It is probably to avoid the continuing increase in the number of empty homes on the market due to possible foreclosure.

Ephesians 4:32

Correct then it puts the mortgagor on the hook not the taxpayer. If they load those unpaid payments onto the mortgage total agains and give them a rate they can handle then we don't go into the real estate business. FAIR? You can through that word out of this mess. IF you change that Mark to Market, the ones that are NOT in trouble will no longer be discounted as the one on their books that are. The Mark to Market has really screwed the financial business with mortgages.


For those who don't understand the Mark to Market this is how is now works with that rule in Sarbanes-Oxley law:

Example:

If the mortgagor has 100 mortgages on their books. If ONE mortgage goes bad they have to reset the worth of the other 99 homes to the level of the bad property. Does that sound FAIR to the people holding the paper? So if the repeal that rule it puts good paper back into the books when the mortgages are ACTUALLY good. That is a very simplistic example but basically that is how it works. They need a Mark to Market on a three-year rolling average. As it is now, they have to reset the values on a daily basis.

Originally Posted by GeorgiaPeach

Equalizer, that part was mentioned by some as not questionable. Many of those loans have been given to people who should have never received them and who could not afford them now. It is probably to avoid the continuing increase in the number of empty homes on the market due to possible foreclosure.

Ephesians 4:32

Georgia, Most of those loans in California,were given to Illegal Aliens, and people on welfare. They should not be bailed out.

Thank you for the explanation Gogo. I know that his has been thought out by Dave and others who are suggesting these alternative ideas.

I am learning something new every day and trying to understand it all.

Ephesians 4:32

Originally Posted by GeorgiaPeach

Thank you for the explanation Gogo. I know that his has been thought out by Dave and others who are suggesting these alternative ideas.

I am learning something new every day and trying to understand it all.

Ephesians 4:32

Yes, far smarter people than we are. Dave Ramsey is very conservative when it comes to money. Renowned economist Westbury said these principles will work and will solve at least 60% of the problem.

As far as shouldn't be bailed out. Let the mortgagor hold them and bail them out instead of us. One way or another its going to happen. Do you want the mortgagor to hold the bag or us.

Another problem is the Hedge funds. They are totally unregulated. TOTALLY. These are wealthy people who get into this markets of stock starting at a minimum of $250,000. Now they buy the same stocks that our mutual funds do for our 401 k. If they dump those stocks you are still hurt because it drives down the value of your stocks in your mutuals. It's a can of worms to be sure. If you begin to regulate them, they will begin to dump their stock and the same thing will happen. Hedge funds rate of return is around 85-90%. Then people want to scream about the oil companies. Their rate of return is only about 8.5%

You are right Equalizer. I think that this is one reason that John McCain is for this, to bail out illegal aliens. I had read the ACORN and Community Reinvestment Act information and I can clearly see this. It is a way for the illegal aliens to stay in homes and to stay in the United States. Juan Hernandez is probably pushing this big time.

I hope that you read the article here at Alipac about the 22 banks in Seattle that ACORN has pushed to do the very same thing. No credit, no proof of identity, a Matricula Consular card is acceptable, and no proof that you can even repay a loan. Credit, checking accounts, all is available. This should be stopped.

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